July 2016

Standards are a critical element of the trade landscape. Standards are regulations set by either public or private bodies (including firms) to ensure that products are fit for consumption, that they meet specific technical standards, or that they can be used as inputs for specific commercial processes such as manufacturing. Developing countries are often hampered by a lack of access to independent and credible inspection, testing, certification and accreditation services – what can be termed the “standards infrastructure."

Over the past 15 years, Sub-Saharan African countries have been on a tremendous journey to reform their business environments. The results speak for themselves: In the “Doing Business” 2016 report, Sub-Saharan Africa recorded about 30 percent of the reforms that were implemented worldwide, and the region boasted half of the world’s top 10 improvers – making it the best-reforming region worldwide. As one example of what those trends mean: It takes four days to register a company in Kenya today, as compared to 54 days as recently as 10 years ago. In Rwanda, it takes an entrepreneur 32 days to transfer property – less time than it takes in Germany – compared to the 370 days that were required 10 years ago.

Despite the encouraging improvements, however, most Sub-Saharan African countries rank in the lower tier of the Doing Business measurements. Beyond the data about business conditions, it takes an average of 130 days for a business in the region to get a new electricity connection – yet, even after that business has such a connection, it experiences frequent power outages. The outages consume almost 700 hours per year – the highest such figure in the world.

We know that good practices, which are being implemented in the region, can help address such problems. The great challenge is to share that knowledge of good practices across reforming countries.

The EDBI is a peer-to-peer learning event that was requested by African countries that hope to facilitate knowledge-sharing about Doing Business reforms. For three days last month, Kenya hosted this year’s conference, whose theme focused on leveraging ICT to improve governments’ service to businesses – and ultimately to each country’s citizens. That theme seemed fitting for Kenya, which is a global success story on seamlessly integrating technology in citizens’ lives. Kenya, as you may recall, is the country that invented MPESA, the unique mobile-money payment system, and that is now rolling out “eCitizen,” the online government service portal.

Today, Cambodia is among the world’s fastest growing economies. Its gross national income per capita increased by more than threefold in two decades, from $300 in 1994 to $1,070 in 2015.

Strong economic growth has helped lift millions of people out of poverty.

The Cambodian people have benefited as the economy diversified from subsistence farming into manufacturing, tourism and agricultural exports. Poverty fell to 10% in 2013, from 50% in 2004. Cambodians enjoy better school enrollment, literacy, life expectancy, immunization and access to water and sanitation.

One year ago, Mongolia was designated an Upper Middle Income Country (UMIC) when the country’s GNI per capita crossed the threshold between lower and upper middle income countries. Some Mongolians celebrated, seeing the designation as a reflection of how far the country had come since recovering from a prolonged slump in the 1990s. Others wondered what it means for the availability of concessional financing in the future. And others just wondered if it was accurate. While Mongolia’s progress is unmistakable, we also know that 22% of the population lives below the national poverty line of roughly $2.70 per day—what does it mean to be an “upper middle income country” in the face of such a statistic?

Last week, Mongolia was re-designated a Lower Middle Income Country (LMIC). How is this possible and what does it mean?

Each year on July 1, the analytical classification of the world's economies based on estimates of gross national income (GNI) per capita for the previous year is revised. As of 1 July 2016, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,025 or less in 2015; lower middle-income economies are those with a GNI per capita between $1,026 and $4,035; upper middle-income economies are those with a GNI per capita between $4,036 and $12,475; high-income economies are those with a GNI per capita of $12,476 or more. The updated GNI per capita estimates are also used as input to the World Bank's operational guidelines that determines lending eligibility.

Changes in classification

The country and lending groups page provides a complete list of economies classified by income, region, and lending status. The classification tables include all World Bank members, plus all other economies with populations of more than 30,000. Please note, regions include economies at all income levels. The term country, used interchangeably with economy, does not imply political independence but refers to any territory for which authorities report separate social or economic statistics. Click here for information about how the World Bank classifies countries. The updated World Development Indicators database, GNI per capita data, and income-level aggregations will be available at data.worldbank.org from Tuesday July 5th.